God and mammon

By appearances, Kathy and Richard Kingsmore's world was picture-perfect. The thirtysomething couple had three kids and a $413,000 house on a quiet street, with purple impatiens bordering the manicured lawn.

The Kingsmores were shining stars at Prestonwood Baptist Church, a North Dallas megasanctuary that attracts a wealthy congregation. Richard was the music minister, paid well to create and arrange the theatrical extravaganzas that are part of the church's lavish services.

His wife, a sweet-smiling brunette, sang in the choir. She'd gained several pounds since winning the junior miss title of Pulaski County, Kentucky, as a teenager, but still had her sparkling smile and flawless retrousse nose.

While Richard ministered through music, Kathy managed business investments, working from the family's three-story house in the Bent Tree subdivision. The family traveled often and had a full-time housekeeper and nanny for their children.

"Her husband's position and their visibility in a large church, the neighborhood they lived in, the schools they sent their kids to--well, it just seemed right," says an acquaintance.

But this summer, the Kingsmores abruptly yanked their children out of private Christian school and fled, leaving behind their home, furniture, clothes, and the family cat.

The explanation for their sudden disappearance showed up later, attached with masking tape next to the forest-green front door of the Bent Tree house: a federal judge's order stripping the Kingsmores of control of their assets, including the house.

The federal Securities and Exchange Commission believes Kathy Kingsmore found more than fellowship among the other choir members and Sunday-school moms at Prestonwood Baptist. In a complaint filed in mid-September, the SEC alleges that Kathy Kingsmore bilked some 34 people--many from her church--out of more than $3 million. Kingsmore's husband, the SEC claims, also benefited from his wife's scheme.

The acquaintance who thought Kathy Kingsmore's life "just seemed right" allegedly lost more than $75,000 by investing money with her.

U.S. District Judge Joe Kendall has given the SEC permission to place the couple's assets into receivership, and has forbidden the Kingsmores from spending more than $5,000 a month--including attorney fees--while the investigation continues.

The Collin County District Attorney's Office is also after Kathy Kingsmore; it is investigating a $13,000 bad check she allegedly wrote to a car dealership in Birmingham, Alabama. The SEC believes she may have written more than $150,000 worth of other bad checks.

A Dallas luxury-home builder has stopped work on a 15-acre piece of land near Frisco after the Kingsmores twice bounced a $5,000 earnest money check, and Kathy Kingsmore is being sued in Florida by one of her investors.

Dozens of others who did business with Kingsmore--most too embarrassed by their own mistakes to speak publicly--want their money back, or at least some kind of explanation.

A soft-spoken woman with an almost childlike voice, Kingsmore, 35, spoke several times with the Dallas Observer, but only briefly. She denied the allegations contained in the SEC complaint. Carl Generes, Kingsmore's defense lawyer, issued a press release in early October. "Kathy S. Kingsmore is a God-fearing, lovely Christian woman," wrote Generes. "She is being falsely accused, and we will vigorously defend her. This is a government witch hunt initiated by a few who are promoting their own vindictive agenda. Ms. Kingsmore is innocent and is being tried in the court of public opinion by the government. She will prevail in a trial on the merits."

If the SEC's suspicions prove right, the "God-fearing, lovely Christian woman" intentionally lured dozens of her friends and family and fellow church members into a fraudulent scheme. But for now there are more questions than answers buzzing about the church where the Kingsmores worshiped and in the neighborhood they called home.

Why would a mother of three with such a comfortable life engage in a scam that ultimately forced her to take it on the lam? Where would a music minister's wife and former junior miss have learned how to conduct a financial con in the first place? How could her husband not have known about it? And how could Richard Kingsmore let his wife go forward with such an ill-fated scheme if he did know?

"None of it makes sense," says Kim Shoemaker, Kathy Kingsmore's stepsister, a secretary for the state of Kentucky's transportation department. "We were raised in the Christian ways of right and wrong."

On a videotape of the Christmas pageant held last December at Prestonwood Baptist Church, Kathy Kingsmore plays a starring role. Dressed in a glittery silver-and-red gown, she sings half a duet in a soft, melodic voice, appearing every bit the country girl who won the countywide beauty pageant while growing up in Somerset, Kentucky.

Kathy Kingsmore's mother and stepfather still live in Somerset, a farming community of 10,000 people about 100 miles south of Lexington, not far from the Tennessee border. Her stepfather raised cattle and grain while Kathy Kingsmore was growing up. At one point, he also owned a landfill where the county dumped its garbage.

In that part of Kentucky, Kingsmore's stepfather's family--the Weddles--ranks as both prominent and large. There are 27 Weddles in the local telephone directory, and when the newspaper publishes lists of contributors to local political campaigns, invariably there's at least one Weddle on each of them.

As a teenager, Kathy Kingsmore won some prominence in her own right. A majorette in her high-school band, Kingsmore was well-liked and well-respected. "She was the girl everyone wanted to know," says one Somerset resident who wound up investing with Kingsmore.

Kingsmore left Somerset to attend the University of Florida in Gainesville, but quit in 1981 without earning a degree. Kingsmore stopped going to college, her stepsister says, so she could be with her then-new husband as he began his fledgling career in the church music business.

Following Richard's career, the Kingsmores moved several times during the 1980s before moving from Birmingham to Dallas in 1992.

That October, Richard Kingsmore started at Prestonwood Baptist Church; he was hired in large part to help with theatrical extravaganzas like the annual Christmas pageant. Kingsmore arranged musical scores for the events, and others in his field regard him as a talented arranger. In the past five years, churches throughout the South--in Louisiana, Tennessee, the Carolinas, and Florida--have used his musical arrangements for their own theatrical productions.

At Prestonwood Baptist, no production is more extravagant than the annual Christmas pageant. It is no shoestring affair cobbled by amateurs. Last year's show included an 800-member cast, 300-member choir, and 50-piece orchestra.

The production exemplified Prestonwood Baptist Church: enormous, entertaining, and expensive.

Since Prestonwood Baptist was started in 1979 by the Reverend William "Billy" Weber and a group of friends, the congregation has grown rapidly and become one of the country's largest. The church is a prototype for the suburban, user-friendly, mall-like sanctuary of the future. Prestonwood Baptist now boasts 13,800 members, with another 150 joining each month. More than 3,000 attend services each Sunday. During the week, thousands go to the church's meetings. The church has a roughly $8-million annual budget, according to previously published reports.

A massive blond-brick structure on the corner of Arapaho and Hillcrest roads, the building looms so large it resembles a community college more than an institution of worship. There are 92 classrooms, 63 offices, a chapel, several stores, and banquet facilities for 1,500.

But that apparently is not big enough. Church leaders are about to break ground on a 138-acre lot in Plano where they intend to build an even larger facility with a planned 700,000-square-foot interior.

Some of the wealthiest families in North Dallas attend Prestonwood Baptist. Aerobics guru Ken Cooper is a member. Cosmetics tycoon Mary Kay Ash used to go, but quit after Weber, the founding pastor, admitted to an extramarital affair and resigned in disgrace. Late-model foreign luxury cars far outnumber economy vehicles in the church parking lot.

Not surprisingly, the congregation ranks as one of the more politically conservative in the area. The church supports an active pro-life campaign, and last year administrators erected a mock graveyard for unborn fetuses in the chapel's front yard to mark the anniversary of the U.S. Supreme Court decision legalizing abortion. Republican presidential nominee Bob Dole, still on his tear about the immorality of Hollywood, spoke at Prestonwood Baptist when he came to Dallas last summer.

The sanctuary itself could be confused with a Broadway theater. It seats 6,000, has an orchestra pit, a balcony, and three television cameras. Members of the orchestra and choir are often costumed in colors that coordinate with the decor.

For musical events, held several times a year, the church spares little. Thousands of dollars are spent on costumes, and professional actors are hired to supplement volunteers from the congregation. Once, for a Fourth of July celebration, the church set off fireworks inside the sanctuary.

For almost four years, Richard Kingsmore helped conceive and stage the church's productions, and Kathy sang in many of them. But these days there is only silence from church officials when it comes to the Kingsmores.

R. Todd Bell, another music minister and Richard Kingsmore's direct boss, declined to speak publicly about the matter, citing his concerns for the church. According to court filings, Bell himself invested money with Kathy Kingsmore and lost it.

Calls placed by the Observer to a variety of other church officials were all funneled to the Reverend Mike Buster, the church's executive pastor, who did not respond to voice-mail messages left on several consecutive days. Buster's secretary finally returned the calls, saying Buster did not have time to talk.

Church officials apparently had some inkling of trouble involving the Kingsmores before the SEC filed its charges against the couple. In a letter dated August 23, 1996--about two weeks before the allegations became publicly known--Bell informed Richard Kingsmore that the church was severing its relationship with Kingsmore.

"This letter is one of the most difficult I have ever had to write," Bell's letter to Kingsmore reads. "But the time has come for the ministry of Christ to have first priority. In light of the current situation, we feel it is in the best interest of Prestonwood Baptist Church to conclude your formal status on our church staff."

Federal investigators believe it was in 1994, two years after Richard Kingsmore started with Prestonwood Baptist Church, that his wife began soliciting money from her friends and fellow churchgoers.

By then, Kathy Kingsmore was already acting like a businesswoman and appeared to be making good money somehow. A former friend who agreed to speak on a not-for-attribution basis says Kingsmore claimed to have started a relatively lucrative business arranging deliveries of asbestos to her stepfather's landfill. An administrator in the Pulaski County solid-waste department confirms that the Weddles' landfill did at one point serve as a repository for asbestos.

Beginning in 1994, the SEC contends, Kingsmore used her husband's position and her own connections to persuade fellow church members, another minister, her stepfather, friends, and acquaintances to invest with her in vaguely defined, secretive overseas banking transactions. According to the SEC, Kingsmore told investors that their money would be pooled and sent to Barclay's Bank in London, where an unnamed third party would trade it in large Eurobond transactions. Instant, effortless wealth would fellow.

"Kingsmore falsely promised investors outrageous returns--up to 500 percent within 90 days--while at the same time claiming that investors' principal is fully secured," SEC lawyers assert in a court document. Many of the investors, SEC lawyers contend, lost their original investments, never mind the promises of exorbitant profits.

But the Kingsmores seemed to be doing well, the SEC alleges. The couple began building a lavish $800,000 beachfront home in Seaside, Florida. Kathy Kingsmore took groups of potential investors on all-expense-paid jaunts to London and the Caribbean, racking up a $55,000 American Express bill in one month alone, according to documents the SEC has filed with the court.

When, as one might anticipate, investors began asking for their money, the SEC alleges, Kingsmore began pyramiding--using newer investors' money to pay back older ones. She also manufactured fake financial documents so that her investors would believe her story, the SEC alleges. In one instance, the government says, Kingsmore forged a monthly bank account statement bearing her name to show a $32-million balance.

In his rulings, U.S. Judge Kendall states that the SEC's lawyers have established a "prima facie case." The judge writes that there is "a strong likelihood" that the SEC will prove at trial that Kathy Kingsmore violated federal laws.

One of the first to invest with Kingsmore was her stepfather. Junior Weddle told SEC investigators that he gave his daughter $800,000 and that initially he received a return of $15,000 a month. But this past January, Weddle told the SEC, the payments stopped.

Although they have reported their daughter to the SEC and contacted and conferred with other investors who lost money, Kingsmore's parents are reluctant to talk publicly about the matter. A woman who answered the phone at Kingsmore's parents' house broke down in sobs when she learned that a reporter was calling.

Kingsmore's stepsister, Shoemaker, says the pressure has cracked the family. "This is a very small town, and this isn't like anything our family has ever been involved in before," the stepsister says. "It is about to destroy us all. We just can't talk about it."

But other investors have given the SEC detailed written accounts of their soured dealings with Kathy Kingsmore. Mark and Sharon Ward moved into the same neighborhood as the Kingsmores in August 1993. It was only a few months afterward that Kathy Kingsmore approached Mark Ward about investing in European bank notes, according to an affidavit Ward gave to federal investigators.

Ward didn't invest at that time, but Kingsmore did not give up. She came back six months later. By then, Ward states in his affidavit, "[S]he appeared to have made a lot of money."

Kingsmore told Sharon Ward that Kingsmore had received a commission for brokering an $82-million bond trust transaction, Mark Ward's affidavit states. Kingsmore wanted the Wards to invest, and showed them a document describing the overseas banking transaction. But Kingsmore would not let the Wards keep a copy of the document, Mark Ward's affidavit states. The SEC alleges that Kingsmore rarely kept any written records, documents, or signed agreements of her transactions with investors.

In that regard, the Wards are an exception. In March 1995, the Wards finally gave Kingsmore $50,000 to invest for them, but got Kingsmore to sign a promissory note for the entire amount.

Kingsmore promised the investment would grow by leaps and bounds, the affidavit states, and that after just three months the $50,000 would grow to about $230,000.

For the Wards, getting a written guarantee from Kingsmore paid off. In July 1995, according to Ward's affidavit, the Wards began insisting on seeing some of their money, and Kingsmore wrote from a personal account a check for $60,000--$10,000 more than the Wards had invested. At the time, according to Ward's affidavit, Kingsmore told him that he had earned much more interest--around $500,000--and that she would reinvest it.

In January 1996, the Wards again pressed Kingsmore for some of those lucrative returns. But this time, without any written guarantee, the Wards were not so successful at getting cash from Kingsmore.

According to Mark Ward's affidavit, Kingsmore wrote him a check for $190,000. He bought a car only to learn several days later that Kingsmore's check had bounced.

Apparently undaunted, Kingsmore continued giving the Wards excuses instead of their supposedly monumental investment bonanza. In his affidavit, Mark Ward states that Kingsmore claimed to have $62 million in a NationsBank account.

Kingsmore eventually exhausted Mark Ward's patience but still managed to get some sympathy from his wife, according to Mark Ward's affidavit.

And Kingsmore transformed that sympathy into money. In June 1996, Kingsmore dropped by the Ward house. Kingsmore confided that a number of her checks were bouncing and said she needed help. Kingsmore said she was expecting a $10,000 wire from her father that afternoon, according to Ward's affidavit. Sharon Ward wrote Kingsmore a check for $7,500. A few days later Kingsmore wrote a check to return the borrowed money. But the check didn't clear. Neither did the one Kingsmore wrote to replace it. "Kingsmore has never repaid those funds," Ward states in his affidavit.

All told, though, the Wards did better than many of Kingsmore's investors; the Wards actually came out slightly ahead. They had made an initial investment of $50,000, received the principal plus $10,000, and then they lost the $7,500 Sharon Ward loaned Kingsmore.

The Wards, who declined to discuss their dealings with Kingsmore, wound up $2,500 ahead. And after the Kingsmores fled town, the Wards also wound up caring for the Kingsmores' cat, left behind to roam about the unoccupied Kingsmore house.

Like the Wards, Pamela Jo Busiek regarded Kathy Kingsmore as a friend. According to an affidavit given by Busiek, the Busiek and Kingsmore children attended Trinity Christian Academy together, and both families attended Prestonwood Baptist Church.

In November 1995, Busiek faced financial problems, and "her friend" Kingsmore knew it. According to Busiek's affidavit, Kingsmore began urging Busiek to get some money and give it to Kingsmore to invest. Kingsmore had a personal connection with a trader in London--named Jonathan--who traded in Eurobank debentures, Kingsmore apparently told Busiek. The transactions could produce a return of approximately 100 percent every 30 days, Kingsmore is alleged to have told Busiek. A law firm in London would guarantee the principal, Busiek understood from Kingsmore, but none of the promises came in writing.

Short on cash, Busiek asked her father to invest some money in Kingsmore's offer. By December 1995, Busiek's father, Perry Moore, had done just that, pouring $125,000 into Kingsmore's account. According to Busiek's affidavit, the money was transferred by wire. Busiek's mother, Peggy Moore, invested an additional $30,000.

But in January 1996, when Perry Moore began asking for his money back, Kingsmore produced only excuses and lies, according to Busiek's affidavit. Busiek's father said he wanted $50,000. Kingsmore wrote him a check for $30,000 and told him the remainder would be sent by wire. But the wire order numbers Kingsmore provided turned out to be bogus, Busiek states. When Peggy Moore asked for her money back, Kingsmore promised to send $20,000 in four days, but the money did not arrive, Busiek states.

Eventually, after writing multiple bad checks to Busiek and her parents, Kingsmore delivered $23,500 in cashier's checks to the daughter and mother, Busiek's affidavit states. Still, when all was said and done, the Busieks and Moores ended up out about $90,000, Busiek states.

Kingsmore has not repaid that money, but she has offered plenty of creative excuses for her failure, Busiek's affidavit suggests.

According to Busiek, Kingsmore at one point claimed that $300 million was going to be wired from London to Kingsmore's U.S. bank account, but that the money had been frozen by the Internal Revenue Service. Several other government agencies were investigating the source of the money to determine whether it was obtained by illegal means, Busiek says she was told by Kingsmore.

Kingsmore even gave Busiek a NationsBank statement showing that Kingsmore had $32,006,200.54 in a checking account. A NationsBank manager of investigator services has told the SEC that the bank statement was fake. While Kingsmore did have an account at the bank, by no means did it contain more than $32 million.

Busiek told investigators that Kingsmore also produced a letter--bearing the name of a NationsBank official--attesting that the bank had received $10 million from Kingsmore's account in London, but that the money was frozen awaiting a release from the Treasury Department. That document was also a fake, according to NationsBank officials contacted by the SEC.

The phony letter was supposedly signed by Joseph Jetter, who was identified as a NationsBank private banking coordinator. Jetter does work for NationsBank, but he is a senior vice president. Not coincidentally, it is Jetter's signature that appears on cashier's checks issued by NationsBank, making the signature readily available for someone to forge. Kingsmore's apparent forgery contains other errors that were obvious to a NationsBank investigator. The branch address listed on the letterhead is 550 Preston Road, where there is no branch. Jetter's name is signed as "Joseph." But, he says in his affidavit, he always signs simply "Joe."

Last May, desperately hoping to recover some of their money, Pam Busiek and her parents flew to London hoping they could finally meet the trader who, according to Kingsmore, was handling their investments. They stayed for 11 days, but the mystery trader did not show.

On a recent sunny Sunday afternoon, a father and two sons toss a football on the quiet street in Bent Tree near where the Kingsmore house sits empty.

The Kingsmores were nothing if not friendly, neighbors say. A few weeks after the Kingsmores moved in, one neighbor recalls, the newcomers invited their neighbors to a movie.

Kathy and Richard Kingsmore played cards with several families in the neighborhood. Richard Kingsmore, in particular, was often seen playing outside with his children. "He was a devoted father," says one neighbor.

The Kingsmore children had many playmates in the neighborhood, and would invite neighborhood kids to the Kingsmore house. That became a problem, though, when Kathy Kingsmore's financial dealings became so tangled that she began ducking her friends and neighbors.

Apparently fearful of facing angry investors, Kingsmore often would not answer the phone or doorbell, making things tough for neighborhood parents who were trying to find their kids.

"Your kids would be over at their house," recalls one neighbor, "and yet no one would come to the door."

In its initial complaint, the SEC states that the Kingsmores fled Bent Tree and went into hiding. But as the SEC has subsequently discovered, the Kingsmores simply resettled in Winston-Salem, North Carolina, Richard Kingsmore's hometown, where he is now working for the Calvary Baptist Church.

The Kingsmores are not hiding. They are listed in the telephone directory there, and on some occasions Kathy Kingsmore answers the phone herself.

When first contacted by the Observer, Kathy Kingsmore claimed she wanted to tell her side of the story. But in ensuing days she repeatedly postponed scheduled interviews, always proffering some new reason.

"I might be able to talk to you in three days," Kingsmore suggested when she was first contacted. Three days later, she promised to talk the very next day. The following morning she said, "Later this afternoon." That afternoon and another six times, Kingsmore promised to talk the day following each phone call.

Her excuses for the delays ranged wildly. She had unexpected visitors. Her children were within earshot and she didn't want them to hear about the allegations. Her 11-year-old daughter was ill. "She's vomiting and she has diarrhea," Kingsmore said, offering more details than necessary. Twice Kingsmore said she herself felt sick--again offering uncomfortably too many specifics.

"Why should I talk?" Kingsmore asked in an unguarded moment. "Everybody in Dallas believes I am a lying, scheming thief, anyway." But during the next telephone call, Kingsmore sounded an entirely different note. "I really do want to tell my side of the story," she said. "I like you. I don't know you but I like you."

By late last week, Kingsmore had grown more forthright. Contacted one last time, she said that she had a headache, but also conceded that she would not talk because her lawyer had advised her to stay mum. "My lawyer would prefer my story come out another day," she said.

In court filings, Kingsmore's lawyer asserts that his client has not violated any securities laws since she did not sell securities or represent herself as a financial adviser who received commissions. She merely invested money for family members and friends as a favor, the lawyer contends.

It is true that Kingsmore could be charitable to her friends and acquaintances.

In March 1996, the SEC alleges, Kingsmore took 20 guests, mostly church members, to Nekar Island in the Caribbean and covered all the expenses. At least she said she was paying the expenses. The travel agency that helped arrange the trip has subsequently given prosecutors two checks written by Kingsmore for a total of nearly $130,000 that were returned for insufficient funds.

Kingsmore also took a group of church members to London for an all-expense-paid trip. Many of the travelers could not have afforded such a voyage on their own, says a former friend of Kingsmore who was familiar with the trip's guest list.

Kingsmore traveled to London on another occasion last year. Her traveling companion on that trip was Ed Highlander, an acquaintance of Kathy Kingsmore's who has been served with a notice of deposition by SEC lawyers.

A resident of Beckley, West Virginia, Highlander says in an interview he is engaged in the oil and coal business. He says he met Kingsmore through a Houston lawyer, realized she owed some money to her father, and tried to help her develop business deals to raise some cash.

But Highlander does not seem to possess the background or standing of a benevolent energy industry captain. For starters, he works out of his wife's flower shop in Beckley. His name surfaced in news reports nine years ago when he and several other businessmen in Charleston, West Virginia, tried to win state health-board approval for a $35-million hospital deal. Highlander and his partners told state officials that there was a Saudi prince who would provide the financing. When the Saudi prince turned out to be a Texan with no apparent source for $35 million, a grand jury initiated an investigation, although Highlander was not indicted or charged as a result.

Highlander says he had no ulterior financial interest in building the hospital, and that he was taken in by the fake prince. But Robert Rodecker, a lawyer representing a citizens' group, says Highlander and his partners stood to earn a tidy fee if the deal had gone through. And The Charleston Gazette reported at the time of the grand jury investigation that Highlander said he expected to earn a large commission on the loan. Highlander, the local paper reported, said he had fronted the bogus Arab visitor $5,000 for expenses.

Highlander's characterization of his relationship with Kingsmore seems selective. Although he says he and Kingsmore went to London to look into currency deals, Highlander refuses to provide specifics.

During an interview, Highlander at first says Kingsmore did not ask him to put money into her investment scheme, but later concedes she did. Highlander says he knew the investments didn't pass the smell test. "The people who invested [with Kingsmore] are probably just as stupid as there ever was," he says.

Highlander says he still talks to Kingsmore regularly and does not believe she deliberately tried to defraud others. "I do not believe Kathy Kingsmore would take people unless somebody took her," he says. What could have possibly happened to the investors' money? "I have asked her," Highlander says. "She says she will tell me someday."

Ed Highlander is not the only person the SEC has talked to about Kathy Kingsmore. In October, government lawyers took a deposition from another member of Prestonwood Baptist Church, Charles Adams, who knew Highlander and apparently did business with Kingsmore.

Although the SEC appears interested in Highlander's and Adams' relationships with Kingsmore, neither Highlander nor Adams has been accused by the SEC of wrongdoing.

In his sworn testimony, Adams is vague about whether he had introduced Kingsmore to Highlander. Adams identifies himself as a broker in the oil and gas business. In response to an SEC subpoena of his financial records, Adams produced a copy of his 1995 tax return, showing an income of $187,598.

Adams' wife plays piano for the Prestonwood Baptist Church. Charles Adams says in testimony that he met Kingsmore two years ago at a party for the church's Sunday school.

On several occasions, according to Adams' testimony to SEC lawyers, Kingsmore asked to pass money through Adams' bank account and then send the money to her parents. Adams says he believed Kingsmore owed her parents money.

At one point, Adams testifies, Kingsmore told her parents that she had invested their money with Adams. Adams says that wasn't true, but that he went along with the deception because Kingsmore asked him to.

Only once did he actually get involved in investing with Kingsmore, Adams says in his testimony, and that was when he was supposed to invest $100,000 of hers. Adams says that the deal ultimately made no money, and that he returned the $100,000 principal to Kingsmore. Adams could not be reached to comment for this story. The telephone number he provided to the SEC is no longer working. Adams' attorney did not return phone calls from the Observer.

Something or someone seems to be missing from the picture the SEC has drawn of Kathy Kingsmore. At a minimum, she does not exhibit any sense of where her actions are leading her and taking others.

Earlier this year, Kingsmore began telling friends that her family was thinking of summering in Florida, perhaps renting a place while the Kingsmores' $800,000 beach house was under construction. But several investors, still waiting for their money, warned her not to go. "I and several others told Kingsmore that she had better not leave town before repaying the investors," Mark Ward states in his affidavit.

In late July, Kingsmore told neighbors that the family was going to Six Flags Over Texas amusement park. The Kingsmores did not return that day, and haven't been back to their house since, although Kingsmore called investors from time to time during the summer.

In August, Paul Gage, an investor from Bedford, told the SEC that he got such a call. Kingsmore would not tell him her location, Gage said. But she described her life as difficult. She was living out of suitcases. She was afraid to return to Dallas for fear that her phone had been tapped and bank records intercepted, Gage said she told him.

Gage, the investor upon whose shoulder Kingsmore was figuratively crying, had lost some $75,000 by investing with the music minister's wife.

But shifting truths and mood swings were all part of dealing with Kathy Kingsmore. "She would wake up in the morning and it would be a whole new day and a whole new reason why she couldn't give you the money," says one person who invested money with her.

Kingsmore's temperament, the investor recalls, ebbed and flowed, curiously following banking hours. When the banks were open--and Kingsmore presumably had access to all the money people had given her--she seemed fretful, afraid people were going to ask her to produce their cash. But when the banks were closed, the investor says, Kingsmore would relax. If someone asked for his money, she could rightly claim it wasn't available just then. Says the investor: "Weekends were a breeze for her.